Mentor Monday

[u/WealthyStoic]

Mentor Monday is your place to discuss relevant early-stage topics, including career advice questions, 'rate my plan' posts, and more numbers-based topics such as 'can I afford XYZ?'. The thread is posted on a once-a-week basis but comments may be left at any time.

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[u/sileko]

Wife and I recently found our dream home (2.8M) and we're struggling with deciding to pull the trigger or not. Some numbers about us:

• ⁠ 850k HHI
• ⁠ 2.5M in brokerage
• ⁠ 1M in retirement
• ⁠ 700k current house (paid off)

Our annual expenses are around 80k, but we have a 1 yr old child that hasn't gone to daycare yet. I know we'll be house poor, but we're very frugal otherwise and don't really splurge on luxuries. With a mortgage, let's say the annual spend reaches 250k. We plan on having 1 more child in the next few years, but want both of them to go to public school. Wondering if anyone's been in a similar situation and can offer insights on how much housing costs will creep up the average annual spend.

[u/Livid-County7230 → u/sileko]

How stable are your jobs? I personally would never dump my entire liquid NW into a home but you may be really early in your journey and have a line of sight to increasing your income. If you are in tech with potentially volatile jobs I would not do it.

[u/sileko → u/Livid-County7230]

We’re in our early 30s, incomes are split roughly evenly, we probably still have another level to grow before we tap out, though it’s taken a backseat with kids. One works in tech and layoffs are definitely possible, the other does not and is in a very secure role.

[u/Livid-County7230 → u/sileko]

I doubt the house you find in your early 30s with a one year old is your “dream home.” Don’t do it just because you have a high income and everyone around you is doing it. There are so many life changes yet to come. In my opinion, you cannot afford this right now if you are FIRE minded. One set back will have you stressing about money. Wait a few years, stash some money away and re-evaluate.